September 16, 2016
LANSING – Michigan Attorney General Bill Schuette today announced a settlement was reached with Utah fundraiser Corporations for Character, resolving claims they violated the Public Safety Solicitation Act. Corporations for Character has agreed to pay a civil penalty of $90,000 to the State of Michigan and to withdraw from fundraising in Michigan for four years.
“If you want to raise charitable contributions in Michigan, you have to be honest. Deceptive fundraisers that prey on the elderly and vulnerable will not be tolerated,” Schuette said. “Donors should continue to educate themselves on fundraising scams and should research charities before donating. Don’t get pressured into a quick decision.”
In April, Schuette issued a Notice of Intended Action alleging that Corporations for Character was deceiving Michigan donors by sending pledge forms to those who had not pledged and taking advantage of elderly and vulnerable call recipients.
Schuette also once again reminded donors that some telemarketers, such as Corporations for Character, keep 80% or more of each donation, encouraging donors to research their own charities and to give directly to the selected charity. For more information on professional fundraising costs, see the Attorney General’s 2015 Professional Fundraising Charitable Solicitation Report.
In September 2015, the Attorney General’s office received a complaint from a Michigan resident regarding a Corporations for Character solicitation. The complainant alleged that she had not agreed to pledge, yet received a pledge form in the mail requesting that she fulfill her “promised pledge” of $15 by a “due date.”
Corporations for Character responded to the complaint by producing the recording of the call conducted by its solicitor. The recording confirmed that the complainant never agreed to a pledge. Concerned that Corporations for Character’s misconduct may have extended beyond the complainant, the Attorney General’s office requested additional call recordings.
Corporations for Character produced 850 call recordings. The office’s review of these recordings confirmed twenty-three violations. The violations fell in four categories: (1) the call recipient received a pledge form from Corporations for Character falsely stating that the call recipient had pledged, i.e., violations of the same sort made to the Attorney General’s complainant; (2) the call recipient did not pledge but was sent an informational pledge form with a form showing a pledge amount and a due date; (3) the call recipient’s spouse agreed to pledge, but the form was addressed to the non-pledging spouse stating falsely that that person had pledged; and (4) the call recipient was elderly or otherwise unable to understand and was taken advantage of by the professional fundraiser.
Michigan’s Public Safety Solicitation Act governs solicitations on behalf of public safety organizations and requires professional fundraisers to be licensed by the Attorney General. It prohibits misleading and deceptive acts and taking advantage of the vulnerable, and also requires licensed fundraisers to record their calls.
As part of the investigation into Corporations for Character, the Attorney General reviewed Corporations for Character’s solicitations on behalf other charitable organizations and also found violations.
In each call, the call recipient did not agree to a pledge; nevertheless, Corporations for Character followed the call by sending the call recipient a pledge form informing of his or her “promised pledge” and requesting payment by a “due date.” The call recordings also provide examples of charitable solicitations using pre-recorded audio. The calls are controlled by a live agent, but the voice heard is not live but is pre-recorded.